Hawaii is enticing major filming productions

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The Hawaii film and TV industry quietly enjoyed its best year ever in 2007. For the first time in the state's history, all four counties hosted major Hollywood productions, with Paramount's "Indiana Jones and the Kingdom of the Crystal Skull" on the Big Island, DreamWorks/Paramount's "Tropic Thunder" on Kauai, Universal's "Forgetting Sarah Marshall" and ABC's "Lost" on Oahu, and Disney's "Pirates of the Caribbean: At World's End" on Maui and Molokai.

John Mason, film commissioner for the Big Island Film Office, attributes the draw to the state's recently enacted tax incentive program. "That's what brought 'Indiana Jones' here, when you get right down to it. Of course, they liked the locations. One of the things they were looking for was old-growth jungles for this chase scene they wanted to do. You might think they'd find it in the Amazon, Costa Rica or Mexico, but no. They found it here."

According to Hawaii state film commissioner Donne Dawson, the state's refundable production tax credit, known as Act 88, has generated more than $200 million in direct spend since it went into effect on July 1, 2006 (roughly $185 million in the 2007 fiscal year alone). It grants productions an income tax credit equal to 15% of in-state spend incurred on Oahu and 20% on neighbor islands. That figure isn't so impressive compared to Louisiana or New Mexico, which offer 25% production incentives, or Michigan, which recently instituted a 40%-42% production tax credit. But it doesn't have to be.

"We're not trying to be the cheapest destination," says Walea Constantinau, film commissioner for the Honolulu Film Office. "What we have is tremendous value for the look. That's an intangible that is very real, but it isn't a bottom-line number."

"Forgetting Sarah Marshall" production designer Jackson De Govia says Hawaii isn't so cheap compared to mainland alternatives, but there are ways of making it economical. The film was shot on Oahu's North Shore, where "Lost" is based, so they were able to hire experienced local crew from the series -- which was on hiatus at the time -- and save on the cost of lodging and per diems. The producers were also able to work out a favorable deal with the film's primary location, Turtle Bay Resort, which is mentioned by name several times onscreen.

For the most part, Hawaii is not competing with other U.S states or incentive-rich Canada, but places with similar tropical climates. Some, like Mexico, Puerto Rico and various Central American nations, are hampered by poverty, political instability, weak infrastructure and/or a lack of accomplished English-speaking crews. Others, like Australia and New Zealand, are a grueling 20-hour plane ride away from Hollywood.

That's quite a contrast to Oahu, which is a relatively quick five-and-a-half-hour flight from LAX. "It's one stop and you're into Honolulu," says Here! Networks' Matt Freeman of the trans-Pacific commute he makes as executive in charge of production for the series "Dante's Cove," which shot its first season in the Turks and Caicos islands in the West Indies before moving to Hawaii for Seasons 2 and 3.

It doesn't hurt that America's 50th state is a favored getaway spot for many Hollywood players. In early 2006, Kauai Film Commissioner Art Umezu had resigned himself to the fact that he'd lost Ben Stiller's upcoming "Tropic Thunder" to Mexico. Then in December 2006 he received a surprise call informing him that the $100 million-plus comedy was going to shoot in Kauai after all.

"The (tax) incentive had a lot to do with it, but it also had a lot to do with the fact that Ben Stiller has a home on Kauai," Umezu says. "He has a wife and two young children, and I heard what he really wanted to do was shoot a full day and come home, without flying back to L.A., and spend time with the family."



But such advantages don't necessarily show up on a spreadsheet, which is one of the reasons Hawaii recently lost the $120 million, 10-part HBO miniseries "The Pacific" -- the follow-up to 2001's "Band of Brothers" -- to Australia after the state reportedly declined to exempt the production from the incentive's per-project cap of $8 million.

In fact, the spreadsheets don't look so encouraging for all of the islands. Not counting "Indiana Jones" -- which, according to Mason, spent a whopping $17 million on the Big Island over the course of a few weeks in July and August -- the Big Island's total production revenue is actually down from slightly less than $4 million in 2006 to just shy of $3 million in 2007.

This worries Mason.

"If we count 'Indiana Jones,' it's a phenomenal increase," he says. "But we'll probably not see the likes of that again."

Production-wise, the bread-and-butter staples for Hawaii are not features or primetime shows like "Lost," but international documentaries, travel shows, TV commercials, and magazine and calendar photo shoots. And the economic impact of those do not compare to just a few days spent shooting the coda on "At World's End."

"We're talking the difference between a $100,000 shoot and a $4 million impact," says film commissioner Benita Brazier of the Maui County Film Office.

"Lost" has been a great boon to Hawaii on a multitude of levels, bringing in revenue and expanding the crew base, as well as effectively serving as a weekly "Film in Hawaii" ad. But it is scheduled to wrap in 2010. So the state made sure that Act 88 contains provisions attractive to a variety of productions, not just blockbusters. Its low $200,000 minimum spend requirement makes it feasible for commercials and independent films to take advantage.

The state is also attempting to increase homegrown production with Act 221/215, a 100% nonrefundable business investment credit. One of its notable successes has been Hawaii Film Partners, whose projects include Discovery Kids' live-action series "Flight 29 Down," and "Ape Escape," a series of 38 two-minute cartoons scheduled to air on Nickelodeon's NickToons Network.

Of course, there is no assurance that the incentives will last forever. Act 88 is set to expire in 2016, and Act 221/215 expires at the beginning of 2011 -- and there's always the chance the legislature could strike them down before then.Is the film community confident the incentives will be renewed?

"The mood at this point is 50/50," says Hawaii Film Partners co-founder Rann Watumull.

Dawson is more optimistic. She's working to get the legislature to enhance Act 88 with a provision that encourages more local hires. And although business is down this year due to the WGA strike and the threat of an actors strike, she is hopeful that they will soon have a new privately owned studio complex to complement state-owned Hawaii Film Studio on Diamond Head, which has only one soundstage.

In the meantime, Hawaii continues to earn raves from those who do make the trip.

Says "Dante's Cove" star Tracy Scoggins: "The only bad thing I can say about shooting there is my hair gets frizzy."




Fest on the Beach

The Maui Film Festival screens under the Pacific firmament

By Chris Edling

As director Joel Coen said in his recent Oscar speech, making movies can be like playing in your own corner of a sandbox.

The Maui Film Festival has plenty of sand to go around. Founded in 2000 and held in the picturesque resort community of Wailea, the June 11-15 fete draws over 8,000 attendees for screenings, culinary events and parties.

A calculated joie de vivre is apparent in the Festival's lineup of posh culinary events.
 Opening night features the first of three "Tastes" at the Fairmont Kea Lani, followed later in the week by the Four Seasons Resort's Taste of Chocolate and the hilltop Taste of Wailea. Parties such as the Starry Night MoonDance and a VIP soiree for filmmakers further distinguish the Festival's bon vivant atmosphere -- not to mention a substantial roster of A-list luminaries. (Past attendees have included William H. Macy, Clint Eastwood and even the Dalai Lama.)

Lifestyle accents aside, the festival's defining attribute is a series of open-air movie screenings. The Celestial Cinema, for example, draws over 3,000 people to the driving range of the Wailea Golf Club for nightly double features under the stars. Down by the shore, the solar-powered SandDance Theater treats attendees to complimentary "toes-in-the-sand" digital screenings, while the roof of the Wailea Beach Marriott Resort & Spa plays host to the "in-the-clouds" Maui SkyDome.

Combining these events with a good excuse to visit Hawaii, the Maui Film Festival is becoming a noteworthy corner of the festival circuit sandbox.

Tax benefits Can make Hawaiian filming a financial paradise

Hawaii offers a three-pronged program of tax incentives for film and television production. This includes a 15%-20% refundable production income tax credit, a 100% nonrefundable business investment credit, and a royalties tax exemption for performing arts products.

The production credit is equal to 15% of qualified production expenditures incurred on Oahu; the credit rises to 20% for all other islands. To be eligible a company must spend $200,000 in qualified production costs (maximum $8 million per production). These costs must be incurred in Hawaii and are subject to Hawaiian income tax or excise tax.

Companies that maintain a long-term presence in Hawaii and seek local investors can also benefit from Hawaii's high-technology business investment tax credit. The credit is available to Hawaii taxpayers who invest in a "qualified high-technology business" that produces performing arts products. The credit is equal to 100% of the investment amount, up to $2 million per investor per year, credited over the duration of five years.

And those who benefit from royalties or copyrights may find staying behind after the shoot especially tempting, since Hawaii excludes these dollars from state taxpayers' income and state income tax.



When in town...

Top picks for turning a working weekend into an island holiday
By Todd Longwell

Best Bird's-Eye View of the Islands: Blue Hawaiian Helicopters
The most efficient way to take in the splendor of the islands, from the rain forests of the West Maui Mountains to the slopes of your favorite golf course. Operates out of Maui, Molokai, Kauai and the Big Island. 1 Kahului Airport Road, #105, Kahului; 800-745-2583; bluehawaiian.com

Best Luau: The Feast at Lele
Enjoy poi and roasted pig while grooving to a choreographed, costumed performance of authentic songs and dances on the same beach where the royal family of Maui once partied. On the beach at 505 Front St., Lahaina; 866-244-5353; feastatlele.com

Best Poolside Guest Service:
Four Seasons Resort Maui at Wailea
Care for a reflexology massage with your mai tai? How about chilled towels and an Evian water spritz? This is the place to go. 3900 Wailea Alanui Drive, Kihea; 808-874-8000; fourseasons.com/maui

Best Jungle Cruise Adventure: Ali'i Kayaks
Paddle up the North Fork of Kauai's Wailua River and trek through a tropical rain forest toward the 120-foot Uluwehi Falls. Kayak, dry bag, walking sticks and "local-style lunch" included. 3501 Rice St., Suite 107B, Lihue; 877-246-2544; aliikayaks.com

Best Surfing Lessons:
Rivers to the Sea
Dubbed "surf instructors to the stars," Tide and Kiva Rivers (the twin sons of Maui Film Festival founders and directors Barry and Stella Rivers) offer private surfing lessons along the coast of Maui. Water safety and wave etiquette instruction included. Ukumehame Park, Maui; 808-280-8795; riverstothesea.com
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